Ferry Juliantono’s Plan to Make Red White Cooperatives the Backbone of Rural Economy

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JAKARTA, Investortrust.id — Minister of Cooperatives Ferry Juliantono has unveiled an ambitious plan to transform Indonesia’s cooperative movement into a central pillar of the rural economy. Speaking at a series of meetings with media leaders in Jakarta this week, Ferry said President Prabowo Subianto has tasked his ministry with bringing cooperatives to parity with state-owned enterprises and private corporations.

He said the ministry’s immediate goal is to close the long-standing performance and governance gap between cooperatives and large business entities. “We are assigned by the President to help cooperatives catch up. There are three key priorities: rebranding, governance reform, and digitalization. That’s where our heavy work lies,” Ferry said.

Under his leadership, the Ministry of Cooperatives has begun restructuring its organization to execute this mandate. Among the changes is the creation of a new Deputy Office for Digitalization and Enterprise Development to accelerate modernization across the sector. Ferry said the move will directly support the establishment of 82,000 Red White Village and Urban Cooperatives (KKDMP), which he described as the foundation for a more data-driven and self-sustaining local economy.

Building a Modern Cooperative Ecosystem

Ferry said that the transformation program is designed not only to improve cooperative performance but also to elevate their institutional image and financial strength. “We have lost Bukopin, the Indonesian Cooperative Bank. Its shares were diluted and now most of them are owned by Korean investors. We feel the need to build another cooperative bank—one that is truly owned and managed by cooperatives,” he said.

According to Ferry, the plan for a new cooperative-owned bank is part of a broader strategy to enable the cooperative sector to manage its own liquidity, mobilize savings, and finance small-scale enterprises without relying entirely on commercial banks. The ministry is now preparing feasibility studies and stakeholder consultations to lay the groundwork for the bank’s establishment.

He added that digitalization would play a crucial role in realizing this vision, from data integration and credit profiling to inter-cooperative transactions. “Digitalization is critical—from data development and system integration to creating a more transparent operational model,” Ferry said.

Data-Driven Foundations of the Red White Cooperatives

At the heart of Ferry’s reform agenda is the Red White Cooperative program, launched as a cornerstone of President Prabowo’s economic inclusion strategy. The program aims to establish 82,000 local cooperatives that will function as both economic hubs and data centers at the village and urban ward levels.

Ferry said the program responds to a chronic governance gap that has long undermined rural development: the absence of accurate, integrated data. “We discovered a fundamental problem—the lack of reliable data in villages. It’s not only about potential, but also about needs, assets, and even territorial boundaries,” he explained.

He noted that after 80 years of independence, many villages still lack electricity and internet access, and have no precise datasets to guide local development. The Red White Cooperatives are designed to fix that by maintaining records on population, economic activities, and assets, which can then inform government decisions. “The 82,000 cooperatives are like creating 82,000 companies in forgotten areas. They will become the local data centers and economic engines,” Ferry said.

To ensure the integrity of data management, the ministry is collaborating with the Attorney General’s Office through a monitoring platform called Jaga Desa (Guard the Village). The platform will include a new feature for cooperative oversight to prevent mismanagement and fraud. Ferry said the government is also partnering with universities to train local administrators, as only about five percent of rural residents currently have the skills to manage data properly.

 

Reforming Fertilizer Distribution and Strengthening Food Security

Beyond data and finance, Ferry is linking the cooperative movement to one of Indonesia’s most persistent agricultural problems—the distribution of subsidized fertilizer. He identified distribution inefficiency and lack of transparency, rather than production shortages, as the main cause of fertilizer scarcity at the farmer level.

“The fertilizer itself is fine, but the distribution system is problematic. It’s controlled by entities called Gapoktan, which are poorly supervised and prone to irregularities. As a result, subsidized fertilizer often ends up in palm plantations instead of small farms,” Ferry said.

He emphasized that the Red White Cooperatives would take over fertilizer distribution in rural areas to ensure that supplies reach smallholder farmers directly. “With village cooperatives managing the process, fertilizer distribution can go straight to farmer groups. The issue isn’t the fertilizer—it’s the system,” Ferry said.

The cooperatives will also act as offtakers for agricultural products, helping farmers market their produce and stabilize prices. Ferry revealed that the ministry has been in talks with state-owned food companies to collaborate on storage and logistics.

“When we asked a food SOE if they could consign with village cooperatives, they said they couldn’t due to their financial condition. But some cooperatives are healthier than SOEs. So we are developing a program where cooperatives can help strengthen the SOEs,” he said.

The government has also enlisted support from the military and state enterprises to build logistical infrastructure such as warehouses and rural trading posts to sustain the distribution of basic goods and farm inputs.

Enforcement and Oversight

In parallel, the Ministry of Agriculture has intensified supervision of the fertilizer trade. Minister of Agriculture Andi Amran Sulaiman announced earlier this month that 2,039 fertilizer kiosks found selling above the official price ceiling would lose their licenses. The crackdown followed investigations in 285 regencies and cities across 28 provinces, with the heaviest violations recorded in East Java, Central Java, South Sulawesi, North Sumatra, and Lampung.

“The losses reach hundreds of billions of rupiah per year. If this continues for ten years, it could reach Rp 6 trillion. Our farmers—160 million people with their families—must be protected. They are the backbone of our food security,” Amran said.

Ferry said these actions reinforce the broader cooperative reform agenda: to return control of rural supply chains and financial systems to community institutions, supported by transparent data and government oversight. “This is about restoring the cooperative as a tool for economic sovereignty, not just a legal formality,” he said.